Does your home insurance policy cover termite damage?

Does your home insurance policy cover termite damage?

The presence of termites in your house can be a cause for alarm for your family’s as well as your home’s well-being. Unfortunately, by the time you spot the termites, they may have already caused significant harm to your property. 

Worse, the average home insurance policy usually does not include coverage for termite damage, which is considered gradual damage arising from negligence or improper maintenance. While you may be able to buy a specialised insurance policy from a pest control agency, dealing with termite damage can be expensive. You need to be particularly careful about termite damage if you are buying a house that was previously occupied.

If you are concerned about the presence of termites, consider getting your home inspected by a pest control expert, ideally before you move in but certainly at regular intervals. Besides helping you fix or prevent termite damage to your home, a pest control expert can also advise on how often you’ll need to take further measures. For instance, you can prevent termite infestation by putting in place a soil barrier or trench around your home, with the soil coated with a termite repellent or poison, which may be effective for a few years. 

You should remember that the methods pest control experts are likely to suggest, such as the soil barriers, are preventative measures and cannot help if termites are already present in your home. You may need to apply the termite repellent or poison directly to the infested areas in such a case.

Again, if your home has been infested, you’ll likely need more than one termite control measure, depending on whether your home has vulnerable areas where timber and water are available near each other. In the event your home is infested multiple times, stronger and more frequent treatment may be required.

What is home insurance coverage for termite damage likely to cost me?

Your home insurance provider will likely not cover termite damage, which leaves you paying for the pest controller to inspect and treat your home, as well as footing the bill for any repairs. Hiring a professional pest control inspector who may use advanced imaging tools to check for termite presence under the floorboards in your home, can cost you between $250 and $350.

This cost varies based on the size of the infestation, the location and construction quality of your home, and the type of treatment and chemicals used. You may have to pay more if you buy an extended warranty along with the treatment. Some of the methods used, with illustrative costs, are discussed here.

  • Termite repellents: You can choose to treat termite infestation by applying termite repellent at the infested spots. This is only a temporary measure as other parts of your home may still be damaged by termites. This may cost you up to $500. 
  • Termite poisons: You can consider using a termite poison which is slower to act but more effective than the repellent as the termites tend to carry the poison back to their colony, eliminating the termites in the nest as well. While termite poisoning will likely put a stop to the infestation in your home, it may not be enough if you live in an area likely to support multiple termite colonies. You may have to pay as much as $700 for treating your home with termite poisons.
  • Termite barriers: You may need to install a treated soil barrier as a preventative measure if your home is infested often. This will likely involve drilling into your home’s concrete slab near, for instance, your home’s outer edge or patio and around pipes. Since this process uses specialised chemicals, it can cost you as much as $3,500, although you don’t have to repeat the process for a few years.
  • Termite baiting stations: Some pest controllers may recommend using an even more specialised technology called baiting stations, which are designed to prevent the termites from growing their colony. You may need to check from time to time if the termites are consuming the bait which contains a growth regulator. These baiting stations are meant to repel termites besides helping you monitor and prevent their growth, but termites may avoid the baiting station by finding other paths to your home. Installing a baiting station and deploying the bait may cost you as much as installing a termite barrier.

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Learn more about home insurance

Does home insurance cover termite damage?

It is unlikely that the average home insurance policy will cover damage caused by termites, mice, or other vermin, which are typically the result of negligence. For instance, water may have seeped from a heater or washing machine and dampened the woodwork in your home, attracting termites. Since termites usually build colonies, you’ll need to deal with the existing infestation and also take preventative steps to prevent future termite damage.

Treating your home for termite damage can be quite expensive, and you’ll likely have to make significant repairs depending on the size of the infestation. You may want to check if your neighbours have also had termite damage issues, and consider taking more long-term measures to keep termites away.  For example, you could install a chemically-treated soil barrier or baiting station, both of which may be effective for a few years. 

Consider inspecting your home  for any leakage or seepage from time to time, especially in the flooring or the outer edges of your home, as a precaution against damage by vermin. You may also want to consider hiring a pest control professional who can inspect and treat your home to protect against termites.

Do I need home insurance for a home loan?

While home insurance isn’t necessarily a requirement for a home purchase per se, it’s likely that if you’re purchasing a home with the help of a home loan, you’ll need to take out home insurance on the property. Home insurance can be one of the factors required in the pre-settlement documentation for a home purchase, and you may be advised by either the bank or a broker (or both) ahead of settlement.  

What is a home insurance premium?

Your home insurance premium is what you pay your insurance provider for covering your home under their home insurance policy. It is calculated based on the type of coverage you choose for your home as well as any additional coverage you buy for either your possessions or specific incidents. Your premium can either be paid annually or in smaller instalments. 

Your home insurance policy may cover the total replacement cost, which is the actual expense of rebuilding your home from scratch. Alternatively, it can cover an insured sum, which is a predetermined estimate of what it might cost to rebuild your home. You’re more likely to pay a higher premium for total replacement cover than for insured sum coverage.

Apart from selecting your coverage, you’ll have to figure out your excess, which is the amount you pay out of your own pocket for each insurance claim. If you are okay with paying a higher excess, your insurance premium may be lower. Conversely, if you choose a lower excess, you may pay a higher premium. 

Your insurance premium can also be higher if you live in an area prone to incidents like floods, bushfires, or theft, as insurers are more likely to receive a higher number of claims in such neighbourhoods. 

If you also want to buy insurance for your belongings, a combined home and contents insurance policy may have a lower premium than paying premiums on separate policies for your home and your belongings. 

Is hail damage covered by home insurance?

If storms are among the incidents covered by your home insurance policy, hail damage protection is more than likely assured. While all policies differ based on your needs and what a home insurance provider will offer, some things are close to a certainty. 

Extreme weather events tend to be unpredictable in their severity, but dangerous all the same. You'll never be able to fully prepare for any damage caused, be it lightning, strong winds, rain leading to flooding, or hailstorms, but home insurance can at least provide you with a way to deal with life's unpredictable nature. 

If your home suffers from hail damage, you can file a claim with your insurer. In the event that this happens, remember to take pictures of any hail damage as an insurance adjuster will need to evaluate the impact on your home. Any additional wind damage to your roof will also need to be documented similarly.

You may want to check if your home insurance also covers hail damage to the cars parked on your property, and then file the claim for the total damage caused by the hailstorm. Once your claim is approved, your insurer should offer you either a cash settlement or refer you to a network vendor for the necessary repairs.

How do you compare home insurance rates?

When you compare the home insurance quotes offered by various Australian insurers, consider looking at the type of coverage they offer as well as coverage limits and exclusions. You can choose an insurance policy which covers either the total replacement cost, which is the actual cost of rebuilding your home from scratch, or a fixed insured sum, which is an estimate of the cost to rebuild. The home insurance policy is likely to cost you more if you go for the total replacement cost coverage.

Your insurance policy’s exclusions and coverage limits usually depend on how exposed your home is to adverse events like floods and bushfires. It also tells you the maximum compensation that your insurer is likely to pay for damage caused to your home. If you live in an area with a greater incidence of crime or disasters, your insurance policy will likely cost you more.

The amount you actually pay for home insurance can be adjusted by agreeing to a higher excess, which is what you will pay over and above the insured amount from your own pocket. You should consider using the online calculators provided by various insurers to check how different coverage limits affect your insurance premium.

Are bikes covered under home insurance?

Ordinarily, home insurance only covers damage to your house, which can include additional buildings such as garages, sheds, and fences, as well as permanent fixtures. 

However, to protect the items located in your home or in any of these other buildings, you will likely need to purchase home and contents insurance. Even so, your bike would only be covered if it does not require separate vehicle registration, as is the case for bicycles and 50cc minibikes, but not motorcycles, and only when located on your property, parked or otherwise. 

Depending on the cost of your bicycle or minibike, you can have it listed in your home and contents insurance as a high-value item. You'll want to check your insurer’s Product Disclosure Statement (PDS) to know the normal coverage limit for a bike included as part of your home and contents insurance, as well as the incidents which are covered. 

Insuring your bicycle can be distinct to insuring any personal effects on your bike at the time, or even using the bike when you're out and about. If you want to cover those, such as something in a basket or a camera equipped to the bicycle, or the bike itself as you travel, you will likely need to purchase additional personal effects insurance. You can also read about any additional coverage available under the personal effects policy, though for full coverage, an ideal option will likely be a separate bike insurance policy.

What does home insurance cover?

What home insurance specifically covers and the extent of the coverage depends on the insurance provider and the individual policy. However, home insurance typically covers the property and other permanent structures found on or in the property, such as fences, in-ground swimming pools, garages, and dishwashers, to name a few.

There are usually two types of homeowner's insurance you can choose from, with "total replacement cover" or "sum-insured cover". 

If you’re not sure which option to take, it may be worthwhile to speak to a professional valuer to understand how much it might cost to rebuild your home and replace what's inside.

Do I need home insurance?

While homeowners' insurance is not legally required, it’s an option for those who want financial protection for their property. Some mortgage lenders may even require borrowers to take out home insurance.

How much is home insurance?

How much your home insurance could cost and the amount of premiums you pay will depend on many factors, including the amount you need to cover, the excess you're willing to pay, and what type of cover you want to take. 

It's important not to base your insurance policy decision solely on the premiums being charged, reviewing what the policy covers, its features, claim exclusions, and caps when deciding which home insurance policy is the right one for you.

What is home insurance?

For homeowners, home insurance can provide some financial protection to your property when things don’t go as planned. If you have home insurance and your property is damaged (or even the permanent fixtures inside), you could make a claim to your insurer to cover the costs of getting it fixed, replaced or rebuilt.

The idea behind property insurance is that you pay insurance providers to take on the risk of loss or damage to your property that you would otherwise be carrying.